Brent Berry v. Native American Services Corporation

USCA11 Case: 23-10600 Document: 48-1 Date Filed: 07/25/2024 Page: 1 of 42

[PUBLISH]

In the

United States Court of Appeals

For the Eleventh Circuit

____________________

No. 23-10600

____________________

DENNIE GOSE,

Plaintiff,

BRENT BERRY,

SEAN GOSE,

as Personal Representative of the Estate of

Deceased Relator Dennie Gose,

Plaintiffs-Appellants,

versus

NATIVE AMERICAN SERVICES CORPORATION,

GREAT AMERICAN INSURANCE GROUP, INC.,

d.b.a. Great American Insurance Company,

Defendants-Appellees.

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2 Opinion of the Court 23-10600

____________________

Appeal from the United States District Court

for the Middle District of Florida

D.C. Docket No. 8:16-cv-03411-SCB-AEP

____________________

Before JORDAN, LAGOA, and TJOFLAT, Circuit Judges.

TJOFLAT, Circuit Judge:

The federal government awards billions of dollars in con-

tracts annually.1 Sometimes, the Government may award con-

tracts to specific types of small businesses via set-aside programs.

See 15 U.S.C. § 637; 48 C.F.R. § 19.501. One such program is the

Minority Small Business and Capital Ownership Development Pro-

gram—more commonly known as the 8(a) program. Under the

8(a) program, contractors are subject to various requirements.

One of those requirements is the obligation to notify the Small

Business Administration (SBA) when contractors no longer satisfy

the requisite ownership or control thresholds for inclusion in the

program. 13 C.F.R. § 124.515(g).

1 See A Snapshot of Government-wide Contracting for FY 2021, U.S. Gov’t Account-

ability Off. (Aug. 25, 2022), https://perma.cc/VFR4-HJZE (“In Fiscal Year

2021, the federal government spent $637 billion on contracts . . . .” (emphasis

omitted)); Contractual Services and Supplies, USASpending, (Mar. 30, 2024),

https://perma.cc/5PQN-SEY6 (reporting $462.7 billion obligated on govern-

ment contracts as of March 30, 2024).

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23-10600 Opinion of the Court 3

In this appeal, we face several questions related to the 8(a)

program but two are most important. First, whether a business

that has graduated from the 8(a) program but is still bidding and

performing work on 8(a) contracts is an 8(a) “participant” and

therefore subject to the program’s ownership and control require-

ments. And second, whether submitting bids and claims for pay-

ment under those circumstances without notifying the SBA pre-

sents an actionable claim under the False Claims Act (FCA).

DWG & Associates, Inc.—an architecture and construction

firm owned by Relators Dennie Gose and Brent Berry—was

awarded several 8(a) contracts.2 Years later, DWG grew too large

and graduated from the 8(a) program, although SBA regulations

allowed it to continue fulfilling orders on 8(a) contracts it had al-

ready been awarded. When DWG ran into financial troubles,

Great American Insurance Company (GAIC)—the company that

had issued surety bonds on DWG’s projects—and Native American

Services Corporation (NASCO)—the company DWG partnered

with to help complete its contracts—allegedly took control and

majority ownership of DWG. Rather than notify the SBA to seek

a waiver as required by the regulations, DWG (now under GAIC

and NASCO’s control) kept bidding on jobs and submitting claims

under the contracts.

2 Although Sean Gose is listed in the case caption because he is the personal

representative of Dennie Gose who passed away in November 2018 after the

suit was filed, our “Gose” references mean Dennie Gose.

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4 Opinion of the Court 23-10600

Relators filed a qui tam suit under the FCA, alleging that by

doing so GAIC and NASCO used DWG to present false claims.

The District Court granted GAIC’s and NASCO’s motions to dis-

miss. It found, among other things, that because DWG graduated

from the program, it was no longer an 8(a) participant and thus the

control and ownership regulations no longer applied to DWG. Re-

lators therefore failed to plead that any false claim was made.

After careful review, and with the benefit of oral argument,

we reverse. A business still bidding or performing work on 8(a)

contracts remains a participant and is still subject to the program’s

requirements. And, in some cases, when such a business submits

bids without obtaining a waiver from the SBA and later submits

claims for payment, that business has presented a false claim under

the FCA.

Our opinion proceeds in four parts. In Part I, we recount

the factual and procedural history that brought the case to us. In

Part II, we lay out the applicable legal standards. Part III analyzes

the issues before us, paying special attention to the intricacies of

the 8(a) program, defining the meaning of “participant,” and ex-

plaining how a fraudulent inducement theory raises a cognizable

false claim under the FCA. Part IV briefly concludes with instruc-

tions for the District Court on remand.

I. Background

We begin by describing DWG’s foray into the 8(a) program,

how DWG became involved with GAIC and NASCO, and the Dis-

trict Court proceedings.

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A. DWG is Formed and Admitted to the 8(a) Program

After completing his military service and obtaining an archi-

tectural license, Gose founded and incorporated DWG in 1995.

DWG later acquired CDR Enterprises, which brought Berry to the

company. Gose was DWG’s CEO and a 51% shareholder while

Berry was DWG’s CFO and a 49% shareholder.

In March 2004, DWG was admitted into the 8(a) program

based on Gose’s disadvantaged status. 3 DWG then successfully bid

on and was awarded several 8(a) set-aside Indefinite Delivery In-

definite Quantity (IDIQ) contracts (both single and multiple

awards) for construction and building design. 4 While DWG held

these contracts, it competed among a pool of 8(a) contractors for

task orders—i.e., “orders for the performance of tasks during the

3 We define what disadvantaged means under the 8(a) program below. See

infra note 10.

4 An IDIQ “contract provides for an indefinite quantity, within stated limits,

of supplies or services during a fixed period. The Government places or-

ders”—known as delivery orders for supplies or task orders for services—“for

individual requirements.” 48 C.F.R. § 16.504(a); see also id. § 2.101 (“Task or-

der means an order for services placed against an established contract or with

Government sources.”).

“An agency usually awards within an IDIQ contract a pre-set base period

of performance, with elective option years that the government may exercise

if it chooses to extend the duration of the contract.” Dominick A. Fiorentino

& Alexandra G. Neenan, Cong. Rsch. Serv., IF I 2558, Indefinite Delivery, Indef-

inite Quantity Contracts 1 (2023). And IDIQs—which come in a variety of

sub-types—may be awarded to a single contractor or to multiple contractors,

who then compete over individual delivery or task orders. See 48 C.F.R.

§ 16.504(c) (noting a general preference for multiple award contracts).

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period of the contract”—on the multiple award contracts.

48 C.F.R. § 16.501-1.

As with most federal construction contracts, DWG was re-

quired to obtain surety bonds to protect the Government’s inter-

ests for DWG’s nonperformance.5 To comply with this require-

ment, DWG obtained surety bonds for its task orders from GAIC.

In exchange for the bonds, Gose, Berry, and their spouses entered

into an indemnity agreement with GAIC in which they put up their

personal assets as collateral.

By early 2010, DWG had been so successful that it outgrew

the 8(a) program’s size limits and therefore graduated. That meant

that DWG could no longer compete for new 8(a) contracts. But

because Gose still controlled and owned a majority share of DWG,

as required by the regulations, DWG was eligible to bid on task

orders under previously awarded 8(a) contracts.

B. GAIC and NASCO’s Alleged Takeover of DWG

DWG’s success was short-lived. By June 2012, its financial

situation deteriorated, and it was in danger of defaulting on its ex-

isting contracts. If DWG defaulted, GAIC would have been liable

for more than tens of millions of dollars in uncompleted projects.

5 See 40 U.S.C. § 3131(b) (“Before any contract of more than $100,000 is

awarded for the construction, alteration, or repair of any public building or

public work of the Federal Government, a person must furnish to the Govern-

ment [performance and payment] bonds . . . .”); 48 C.F.R. § 28.102-1(a) (“[T]he

Miller Act[] requires performance and payment bonds for any construction

contract exceeding $150,000 . . . .”).

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And—under the indemnity agreement—Gose, Berry, and their

spouses were at risk of losing the assets they had pledged as collat-

eral. When DWG notified GAIC about its financial condition,

“GAIC froze DWG’s bonding program and refused to issue further

bonds without third-party indemnification.” And without a surety,

DWG could no longer bid on task orders.

To thaw GAIC’s bonding restriction, DWG needed help. So

Berry began negotiating with construction companies to assist

DWG with its backlog of government contract work and to poten-

tially partner on or acquire DWG’s future work within the 8(a) pro-

gram’s limits. NASCO was one of those companies. Yet, by Au-

gust 2012, GAIC instructed DWG to stop negotiations with any

other potential partners besides NASCO.

That’s when “GAIC and NASCO forced Gose out of the pic-

ture.” According to Relators, GAIC and NASCO conspired to use

their financial leverage over Gose to strong arm him into several

agreements, one of which was on behalf of DWG. One of those

agreements—a “Right of First Refusal and Option Agreement”—

gave NASCO a right of first refusal to buy all of Gose’s shares of

DWG and restricted Gose from selling less than all his shares. The

second agreement—the Final Management and Advisory Services

(MAS) Agreement—assigned 100% of all contract proceeds to

GAIC and NASCO. 6

6 Under the Final MAS Agreement, NASCO would receive 98% of all contract

proceeds and GAIC would receive the remaining 2%.

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As a result, Gose alleged that he lost both control and 51%

unconditional ownership of DWG. At some point, DWG’s attor-

ney warned GAIC and NASCO that these agreements “potentially

violated SBA regulations” because DWG’s 8(a) eligibility status

hinged on Gose’s control and ownership. NASCO acknowledged

this warning but pressed ahead with finalizing the agreements.

With the agreements finalized, GAIC and NASCO took con-

trol of DWG. Among other things, Relators alleged that:

(1) NASCO directed Berry to notify Government contracting offic-

ers, on behalf of DWG, that NASCO was now a “critical subcon-

tractor”; (2) NASCO laid off DWG personnel and replaced them

with NASCO employees; (3) GAIC suspended part of DWG’s tui-

tion reimbursement program; (4) NASCO ordered and changed

DWG’s cell phone policies; (5) NASCO terminated Berry’s em-

ployment; (6) NASCO reduced Gose’s CEO salary to an amount

lower than other employees; (7) NASCO took control of DWG’s

document and record keeping; and (8) GAIC and NASCO decided

which future task orders to bid on.

But neither GAIC nor NASCO notified the SBA of the agree-

ments or change in ownership and control, despite NASCO know-

ing—as a former 8(a) contractor—that such an ownership or con-

trol change required permission from the SBA. 7 Meanwhile, GAIC

7 NASCO graduated from the 8(a) program in 2008. With the SBA’s approval,

arrangements between graduated 8(a) contractors and current 8(a) contractors

are allowed under the 8(a) Mentor-Protégé program. See 13 C.F.R. § 125.9.

That program helps eligible small businesses (protégés) gain capacity and win

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23-10600 Opinion of the Court 9

and NASCO used DWG to bid on task orders and submit payment

claims to the Government. The Government, unaware of the

agreements, awarded DWG dozens of other task orders and paid

DWG tens of millions of dollars—all of which went to GAIC and

NASCO.

C. District Court Proceedings

Relators then filed a qui tam complaint under the FCA to

recover the payments. Their complaint pled six counts:

• Counts I–II (the false presentment claims) alleged that GAIC

and NASCO violated 31 U.S.C. § 3729(a)(1)(A) by knowingly

making or presenting, or causing to be made or presented,

bids for task orders by DWG that they knew DWG was not

eligible to receive because of its change of ownership and

control;

• Counts III–IV (the false statement claims) alleged that GAIC

and NASCO violated 31 U.S.C. § 3729(a)(1)(B) by knowingly

making, using, or causing to be made or used false records

or statements material to getting false claims paid; and

• Counts V–VI (the conspiracy claims) alleged that GAIC and

NASCO violated 31 U.S.C. § 3729(a)(1)(C ) by conspiring to

government contracts through partnerships with more experienced compa-

nies (mentors). Id. § 125.9(a). But the SBA will not approve such a relationship

if the mentor, among other things, “controls the managers of the protégé[]”

or acquires “an equity interest [over] 40% in the protégé firm.” Id.

§ 12.59(b)(2), (d)(2).

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submit and submitting bids through DWG, which they

knew DWG was not eligible for.

GAIC and NASCO moved to dismiss the complaint. The

District Court granted GAIC’s and NASCO’s motions and dis-

missed Realtors’ claims with prejudice.

As for Counts I–II, the District Court found that Relators

failed to state a false presentment claim, mainly because Relators

failed to adequately allege the existence of a false claim. The Dis-

trict Court reasoned that GAIC and NASCO were not required to

seek a waiver because DWG had graduated from the 8(a) program

when the agreements between GAIC, NASCO, and DWG were fi-

nalized. DWG therefore was no longer a “participant” and not sub-

ject to the regulation’s loss-of-control or mandatory termination

requirements. The District Court continued that, even if DWG

were subject to these requirements, the agreements between

GAIC, NASCO, and DWG did not divest Gose of 51% uncondi-

tional ownership. But the court did not otherwise address whether

Gose had lost control of DWG.

After noting that Relators’ complaint rested on a fraudulent

inducement theory, the District Court reasoned that “[f]raudulent

inducement with regard to bidding on a government contract, as

distinguished from submitting a claim for payment under the con-

tract, is not available as a cause of action under the FCA.” United

States v. Native Am. Servs. Corp., No. 8:16-cv-3411-SCB-AEP,

2022 WL 18932981, at *7 (M.D. Fla. Nov. 14, 2022). Alternatively,

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the court found that Relators failed to satisfy Rule 9(b)’s particular-

ity requirement because they did not provide “information regard-

ing (1) the bids that were supposedly fraudulent, and (2) the claims

for payment supposedly at issue.” Id. 8 Because Relators could

show neither a fraudulent claim nor one that was presented, “they

consequently [could not] prove . . . that the claim was presented

with knowledge of its falsity.” Id. at *8.

As to Counts III–IV, the District Court largely denied Rela-

tors’ false statement claims for the same reasons. Namely, the

court reasoned that Gose and Berry’s complaint did not plausibly,

or particularly, state a claim.

Finally, the District Court turned to Relators’ conspiracy

claims in Counts V–VI. Like Counts III–IV, the court dismissed the

conspiracy claims because there was no plausible false claim and

because Relators failed to satisfy Rule 9(b).

Relators moved for reconsideration. And the Government

filed a Statement of Interest. The Government stated that the Dis-

trict Court erred by: (1) concluding that the change in ownership

and control provisions under the 8(a) program lapse when a com-

pany graduates, and (2) finding that fraudulent inducement is not

cognizable under the False Claims Act. The District Court, unper-

suaded by Relators or the Government, denied the motion because

8 As noted below, Federal Rule of Civil Procedure 9(b) requires that when “al-

leging fraud or mistake, a party must state with particularity the circumstances

constituting fraud or mistake.” See infra Part II & Section III.B.1.iv.

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Relators had not presented it with any clear error. And it held firm

to its decision that because DWG had graduated it was no longer

an 8(a) participant. Relators timely appealed.

II. Legal Standards

“We review de novo the district court’s grant of a motion to

dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6),

accepting the allegations in the complaint as true and construing

them in the light most favorable to the plaintiff.” Timson v.

Sampson, 518 F.3d 870, 872 (11th Cir. 2008) (per curiam). “Gener-

ally, ‘[t]o survive a motion to dismiss, a complaint need only pre-

sent sufficient facts, accepted as true, to state a claim to relief that

is plausible on its face.’” Marsteller ex rel. United States v. Tilton,

880 F.3d 1302, 1310 (11th Cir. 2018) (alteration in original) (quota-

tion marks omitted) (quoting Renfroe v. Nationstar Mortg., LLC, 822

F.3d 1241, 1243 (11th Cir. 2016)); see also Bell Atl. Corp. v. Twombly,

550 U.S. 544, 570 (2007).

“However, we also have stated clearly that, in a qui tam ac-

tion, the enhanced pleading requirements of Rule 9(b) apply.”

Marsteller, 880 F.3d at 1310. “A False Claims Act complaint satisfies

Rule 9(b) if it sets forth ‘“facts as to time, place, and substance of

the defendant’s alleged fraud,” specifically “the details of the de-

fendants’ allegedly fraudulent acts, when they occurred, and who

engaged in them.”’” Hopper v. Solvay Pharms., Inc., 588 F.3d 1318,

1324 (11th Cir. 2009) (quoting United States ex rel. Clausen v. Lab’y

Corp. of Am., 290 F.3d 1301, 1310 (11th Cir. 2002)).

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III. Discussion

Relators argue that the District Court erred in two main

ways. First, they contend their complaint plausibly and particularly

established both their false presentment and false statement claims

under 31 U.S.C. § 3729(a)(1)(A)–(B). Second, Relators assert that

their complaint sufficiently pled the existence of an FCA conspiracy

under 31 U.S.C. § 3729(a)(1)(C) between GAIC and NASCO. We

agree and explain why in two parts. First, we detail how the 8(a)

program works. Second, we describe why Relators’ claims were

both plausible and satisfied Rule 9(b).

A. The 8(a) Program

As noted above, the 8(a) program is one of many congres-

sionally developed programs aimed at helping small businesses win

federal government contracts. See 15 U.S.C. §§ 636(j)(10), 637(a). It

does so by giving those businesses preferential treatment when bid-

ding on certain contracts. Id. § 637(a); 13 C.F.R. § 124.1.

The SBA administers the 8(a) program and has promulgated

implementing regulations. See 13 C.F.R. pt. 124. To be admitted to

the 8(a) program, the SBA must certify that a business is both

“small” and “disadvantaged.” See 15 U.S.C. § 636(j)(11)(E)–(F);

13 C.F.R. § 124.101. A business is “small” if it meets the size stand-

ards in 13 C.F.R. Part 121. 9 See 13 C.F.R. § 124.102. And a business

9 The SBA maintains a table of small business size standards in

13 C.F.R. § 121.201. Whether a business is small turns on the applicable North

American Industry Classification System (NAICS) code and a business’s total

annual income or number of employees. See id. NAICS is the standard used

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is “disadvantaged” if at least 51% of the business is unconditionally

owned and controlled by one or more individuals who are both so-

cially and economically disadvantaged. 10 15 U.S.C. § 637(a)(4)(A)–

(B); 13 C.F.R. §§ 124.105 to .106.

Once “admitted to . . . the 8(a) BD program” a small busi-

ness concern becomes a “participant.” 13 C.F.R. § 124.3. Partici-

pants can then bid on federal contracts that are awarded outside

Federal Acquisition Regulation (FAR) Subpart 6.1’s standard “full

and open competition” process, like the IDIQ contracts here.11

48 C.F.R. § 6.100; 13 C.F.R. § 124.501(a). Certification under the

by federal statistical agencies to classify businesses in “collecting, analyzing,

and publishing statistical data related to the U.S. business economy.” North

American Industry Classification System, U.S. Census Bureau,

https://perma.cc/LLJ9-E6X7 (last visited May 13, 2024). “The procuring

agency contracting officer, or authorized representative, designates the proper

NAICS code and corresponding size standard in a solicitation . . . which best

describes the principal purpose of the product or service being acquired.”

13 C.F.R. § 121.402(b).

10 “Socially disadvantaged” persons are those “subjected to racial or ethnic

prejudice or cultural bias within American society because of their identities

as members of groups without regard to their individual qualities. The social

disadvantage must stem from circumstances beyond their control.”

13 C.F.R. § 124.103(a); 15 U.S.C. § 637(a)(5). “Economically disadvantaged”

persons are those “whose ability to compete in the free enterprise system has

been impaired due to diminished capital and credit opportunities as compared

to others in the same or similar line of business who are not socially disadvan-

taged.” 13 C.F.R. § 124.104(a); 15 U.S.C. § 637(a)(6)(A).

11 See supra note 4.

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8(a) program typically lasts for nine years, at which time a partici-

pant automatically exits or “graduates.” 13 C.F.R. §§ 124.2(a),

124.302(a).

But the nine-year term can be shortened by voluntary with-

drawal, “early graduation (including voluntary early graduation),”

or termination. 13 C.F.R. § 124.2(a). Early graduation, like what

DWG experienced in 2010, can occur when a participant “exceeds

the size standard corresponding to its primary NAICS code . . . for

three successive program years.” Id. § 124.302(b). 12 Graduates be-

come ineligible to bid on new 8(a) contracts but remain “obligated

to complete previously awarded 8(a) contracts, including any

priced options which may be exercised.” Id. § 124.304(f )(1)–(2).

And with respect to IDIQ contracts, “[a] concern awarded a[n

IDIQ] contract . . . that was set-aside exclusively for 8(a) Program

Participants may generally continue to receive new [task] orders

12 A participant can also graduate early if the SBA determines that:

(1) The concern has successfully completed the 8(a) BD program by sub-

stantially achieving the targets, objectives, and goals set forth in its

business plan, and has demonstrated the ability to compete in the mar-

ketplace without assistance under the 8(a) BD program; or

(2) One or more of the disadvantaged owners upon whom the Partici-

pant’s eligibility is based are no longer economically disadvantaged.

13 C.F.R. § 124.302(a). And the “SBA may graduate a Participant prior to the

expiration of its program term where excessive funds or other assets have been

withdrawn from the Participant, causing SBA to determine that the Partici-

pant has demonstrated the ability to compete in the marketplace without as-

sistance under the 8(a) BD program.” Id. § 124.302(c) (citing 13 C.F.R.

§ 124.112(d)(3)).

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even if it has grown to be other than small or has exited the 8(a)

BD program.” Id. § 124.503(i)(1)(iii); see also 48 C.F.R. § 19.804-6(d)

(“An 8(a) contractor may continue to accept new orders under [an

IDIQ] contract, even if it exits the 8(a) program, or becomes other

than small for the NAICS code(s) assigned to the contract.”). 13

13 Despite a participant’s ability and obligation to continue performing, agency

contracting officers have discretion “to award an order only to a concern that

is a current Participant in the 8(a) program at the time of the order.” 13 C.F.R.

§ 124.503(i)(1)(iii). “In such a case, the procuring agency will announce its in-

tent to limit the award of the order to current 8(a) Participants and verify a

contract holder’s 8(a) BD status prior to issuing the order.” Id.; see also id.

§ 124.521(e)(1). And, if an 8(a) contract contains options to extend the initial

ordering period past a contract’s base period, a contracting officer’s discretion

to exercise those options to award more task orders depends, in part, on

whether the participant has graduated or been terminated from the 8(a) pro-

gram. See id. § 124.514(a)–(b). For 8(a) contracts “with durations of more than

five years (including options), a contracting officer must verify in SAM.gov . . .

whether a business concern continues to be an eligible 8(a) Participant no

more than 120 days prior to the end of the fifth year of the contract.” Id.

§ 124.521(e)(2). “Where a concern fails to qualify or will no longer qualify as

an eligible 8(a) Participant at any point during the 120 days prior to the end of

the fifth year of the contract, the option shall not be exercised.” Id. (emphasis

added).

We take judicial notice that at least one of the contracts listed in Relators’

complaint was solicited with a period of performance of one base year and

four option years. See SABER - US Air Force Academy, SAM (May 5, 2009, 12:20

PM), https://perma.cc/2CN3-VJJF (stating this information in the presolicita-

tion to contract FA7000-09-D-0020). See Fed. R. Evid. 201(b); Terrebonne v.

Blackburn, 646 F.2d 997, 1000 n.4 (5th Cir. June 1981) (en banc) (“Absent some

reason for mistrust, courts have not hesitated to take judicial notice of agency

records and reports.”). And Relators’ complaint alleges that one contract—

HSCG82-10-D-PMVA53—had a period of performance exceeding five years.

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The SBA may also “terminate the participation of a concern

in the 8(a) BD program prior to the expiration of the concern’s Pro-

gram Term for good cause.” 13 C.F.R. § 124.303(a). The regula-

tions provide several examples of good cause, but relevant here is

§ 124.303(a)(4). Section 124.303(a)(4) permits termination if the

8(a) contractor fails to “obtain prior written approval from SBA for

any changes in ownership or business structure, management[,] or

control pursuant to §§ 124.105 and 124.106.” See also

15 U.S.C. § 637(a)(21)(A) (“[I]f the owner or owners upon whom

eligibility was based relinquish ownership or control of such a con-

cern, or enter into any agreement to relinquish such ownership or

control, such contract or option shall be terminated for the conven-

ience of the Government . . . .”).

And for good reason. The Small Business Act and its imple-

menting regulations direct contracts awarded under set-aside pro-

grams to “be performed by the concern that initially received such

contract[s].” 15 U.S.C. § 637(a)(21)(A). That said, the SBA may

waive the ownership or control requirements if “[t]he 8(a) contrac-

tor . . . request[s] a waiver in writing prior to the change in owner-

ship and control,” 13 C.F.R. § 124.515(c), that demonstrates partic-

ular condition(s) exist. See id. § 124.515(b); 15 U.S.C.

§ 637(a)(21)(B). One significant condition is when:

(5) It is necessary for the disadvantaged owners of the

itial 8(a) awardee to relinquish ownership of a ma-

jority of the voting stock of the concern in order

to raise equity capital, but only if—

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18 Opinion of the Court 23-10600

(i) The concern has graduated from the 8(a) BD

program;

(ii) The disadvantaged owners will maintain owner-

ship of the largest single outstanding block of

voting stock (including stock held by affiliated

parties); and

(iii) The disadvantaged owners will maintain control

of the daily business operations of the con-

cern.

13 C.F.R. § 124.515(b)(5) (emphasis added); 15 U.S.C.

§ 637(a)(21)(B)(v).

B. Plausibility and Particularity

Now that we have laid out the 8(a) program’s foundation,

we can explain why Relators’ claims were both plausibly and par-

ticularly pled. We start with Relators’ false presentment and false

statement claims. And then we address Relators’ conspiracy

claims.

1. False Presentment and False Statement Claims

“The FCA imposes liability on any person who ‘knowingly

presents, or causes to be presented, a false or fraudulent claim for

payment or approval; [or] knowingly makes, uses, or causes to be

made or used, a false record or statement material to a false or

fraudulent claim.’” United States ex rel. Phalp v. Lincare Holdings,

Inc., 857 F.3d 1148, 1154 (11th Cir. 2017) (alteration in original)

(quoting 31 U.S.C. § 3729(a)(1)(A)–(B)). Both provisions share the

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23-10600 Opinion of the Court 19

same elements: “the existence of a false claim or statement, the ma-

teriality of that false claim or statement, and scienter.” Yates v. Pi-

nellas Hematology & Oncology, P.A., 21 F.4th 1288, 1298 (11th Cir.

2021). 14 Though the District Court referenced materiality and sci-

enter, its focus was on the existence of a false claim or statement.

So we concentrate our discussion there.

i. Control and the Meaning of “Participant”

The District Court’s ruling that Relators’ complaint failed to

allege any falsity hinged on its finding that DWG was not an 8(a)

participant. The court reasoned that DWG had graduated from

the 8(a) program, and therefore “the control requirements of [13

C.F.R.] § 124.106(a)(1) did not apply to DWG” at the time of its

alleged takeover in 2012. Native Am. Servs. Corp.,

2022 WL 18932981, at *5. Relators contend that the plain language

of § 124.515(a)(1) and § 15 U.S.C. 637(a)(21)(A), their context,

structure, and regulatory and legislative histories, point to the op-

posite conclusion: “participant” necessarily includes both gradu-

ated and nongraduated businesses. GAIC and NASCO would have

us adopt the District Court’s reading of “participant” along the

same reasoning. That we cannot do. We agree with Relators that

14 The key difference between a false presentment claim and a false statement

claim is that false statement claims do “not demand proof that the defendant

presented or caused to be presented a false claim to the government or that

the defendant’s false record or statement itself was ever submitted to the gov-

ernment.” Hopper v. Solvay Pharms., Inc., 588 F.3d 1318, 1327 (11th Cir. 2009)

(interpreting the pre-2009 amendment version of the statute).

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20 Opinion of the Court 23-10600

such a reading is incompatible with the plain meaning of both

13 C.F.R. § 124.515 and 15 U.S.C. § 637(a)(21)(A).

When interpreting “the meaning of a statute or regulation,

‘the first step is to determine whether the statutory language has a

plain and unambiguous meaning by referring to the language itself,

the specific context in which that language is used, and the broader

context of the statute as a whole.’” SEC v. Levin, 849 F.3d 995, 1003

(11th Cir. 2017) (quoting Bautista v. Star Cruises, 396 F.3d 1289, 1295

(11th Cir. 2005)). “If the statute’s [or regulation’s] meaning is plain

and unambiguous, there is no need for further inquiry.” Id. (quot-

ing CBS Broad. Inc. v. Echostar Commc’ns Corp., 532 F.3d 1294, 1300–

01 (11th Cir. 2008)). “To determine the plain meaning of a statute

or regulation, we do not look at one word or term in isolation, but

rather look to the entire statutory or regulatory context.” Id.

Under 13 C.F.R. § 124.3, “[p]articipant means a small busi-

ness concern admitted to participate in the 8(a) BD program.” That

definition has two components: (1) “small business concern” and

(2) “admitted.” As explained above, “smallness” hinges on the ap-

plicable NAICS code and the “number of employees or annual re-

ceipts” of a business. See 13 C.F.R. § 121.201. And the regulations

define “concern” as a “business entity organized for profit, with a

place of business located in the United States, and which operates

primarily within the United States or which makes a significant

contribution to the U.S. economy through payment of taxes or use

of American products, materials or labor.” Id. § 121.105. Simple

enough.

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23-10600 Opinion of the Court 21

That leaves us with “admitted.” The regulations do not de-

fine the term, but dictionaries provide some help. Webster’s de-

fines “admitted” as “to allow entry (as to a place, fellowship, or

privilege).” Admitted, Merriam-Webster’s Third New International

Dictionary (3d ed. 1993). Similarly, the Oxford English Dictionary

defines that term as “[t]o accept (a person) into any office, status,

or privilege.” Admit, Oxford English Dictionary (2011). Of course,

those definitions get us only so far as they “lack[] any temporal

qualifier and [are] consistent with either current or past” admit-

tance. See Robinson v. Shell Oil Co., 519 U.S. 337, 342 (1997). But no

matter, the regulatory context, structure, and purpose provide a

clear answer. See id. at 342–43 (looking to context to determine

whether “employee” under Title VII meant current or past em-

ployee).

And we need not look far to get that answer. For example,

13 C.F.R. § 124.515(a) requires that “[a]n 8(a) contract . . . must be

performed by the Participant that initially received it.” See also

15 U.S.C. § 637(a)(21)(A). That requirement must be read in har-

mony with the other requirement that “[a]fter the effective date of

early graduation or termination, a Participant . . . . is obligated to

complete previously awarded 8(a) contracts.” 13 C.F.R.

§ 124.304(f)(1); see In re Shek, 947 F.3d 770, 777 (11th Cir. 2020) (“We

must interpret statutes ‘harmoniously,’ reconciling separate sec-

tions so that they are compatible and not contradictory.” (quoting

Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation

of Legal Texts 180 (2012))); United States v. Marte, 356 F.3d 1336, 1341

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22 Opinion of the Court 23-10600

(11th Cir. 2004) (“When a regulation implements a statute, the reg-

ulation must be construed in light of the statute . . . .” (citations

omitted)). Read together, “participant” must include 8(a) gradu-

ates that continue to perform on contracts exclusively set-aside un-

der the 8(a) program. 15

Still not convinced? Hold still; the regulatory structure also

points toward that conclusion. As we just mentioned, the regula-

tions require 8(a) contracts to be performed by the participant that

originally received it, absent a waiver. 13 C.F.R. § 124.515(a). The

next subsection lists the five bases under which the SBA may waive

this requirement, “if requested to do so by the 8(a) contractor.” Id.

§ 124.515(b). In that context, “participant” must include “8(a) con-

tractors” that have graduated yet are still performing an 8(a) con-

tract. It would be odd, if not absurd, for the set of entities eligible

to receive waivers to be broader than the set of entities subject to

regulatory requirement in the first place. See Lewis v. Barnhart,

285 F.3d 1329, 1332 (11th Cir. 2002) (per curiam) (noting that courts

will interpret statutes to avoid “absurdity of results” (quoting

United States v. Weaver, 275 F.3d 1320, 1331 (11th Cir. 2001))).

And that’s not all. The waiver’s substantive requirements

bolster this interpretation. One of the five waiver bases permits a

15 As the Government’s amicus brief points out, not every use of “participant”

includes 8(a) graduates. Context is critical. See Env’t Def. v. Duke Energy Corp.,

549 U.S. 561, 574 (2007). Sometimes “participant” refers only to nongraduated

contractors. See, e.g., 13 C.F.R. § 124.301(a) (“A Participant may voluntarily

withdraw from the 8(a) BD program at any time prior to the expiration of its

program term.”).

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23-10600 Opinion of the Court 23

business to “relinquish ownership of a majority of the voting stock

of the concern in order to raise capital, but only if [t]he concern has

graduated from the 8(a) BD program.” Id. § 124.515(b)(5)(i); see also

15 U.S.C. § 637(a)(21)(B)(v)(I). If graduates are not subject to the

initial requirement in § 124.515(a), why would a graduate ever

need such a waiver? They wouldn’t. So such an interpretation

would render that waiver provision irrelevant. But it is well-estab-

lished that “courts should avoid rendering other provisions of a reg-

ulation superfluous or inoperative.” Glazer v. Reliance Standard Life

Ins. Co., 524 F.3d 1241, 1245 (11th Cir. 2008).

We also have a duty to read the SBA regulations in harmony

with other regulations. See Epic Sys. Corp. v. Lewis, 584 U.S. 497,

525 (2018). That includes the FAR: the regulation that governs

most federal acquisitions. See 48 C.F.R. § 1.104. Like the SBA reg-

ulatory provisions, one provision in the FAR requires 8(a) contracts

to be “terminated for convenience if the 8(a) contractor to which it

was awarded transfers ownership or control of the firm . . . unless

the Administrator of the SBA waives the requirement for contract

termination.” Id. § 19.812(e). Nothing in that FAR provision dis-

tinguishes 8(a) graduates from other participants, and we should

not read the SBA regulation in a way that creates unnecessary con-

flict.

And we would be remiss not to consider “the stated purpose

of the [SBA’s] regulation.” Washington v. Comm’r of Soc. Sec.,

906 F.3d 1353, 1362 (11th Cir. 2018). The application of the change

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24 Opinion of the Court 23-10600

in ownership and control regulations to 8(a) graduates is most con-

sistent with the 8(a) program’s purpose: “to assist eligible small dis-

advantaged business concerns compete in the American economy

through business development.” 13 C.F.R. § 124.1; see also

15 U.S.C. § 631(f) (listing Congressional findings related to this pur-

pose). Can you imagine if 8(a) graduates—still bidding and per-

forming on task orders under 8(a) contracts—were exempt from

the requirement to report and seek approval for changes in owner-

ship and control? That would seriously impair a core limitation on

the businesses that can perform those contracts. Put differently,

adopting GAIC and NASCO’s interpretation would permit ineligi-

ble businesses to obtain 8(a) program benefits by assuming owner-

ship of, or control over, 8(a) graduates with ongoing 8(a) con-

tracts. 16 “We do not see how Congress [or the SBA] could have

16 One more thing just for good measure—“the regulatory history lends sup-

port for [our] interpretation.” SEC v. Levin, 849 F.3d 995, 1004 (11th Cir. 2017);

see also LSSi Data Corp. v. Comcast Phone, LLC, 696 F.3d 1114, 1117 n.4 (11th Cir.

2012) (“A review of the industry’s ‘regulatory history helps to illuminate the

proper interpretation and application’ of the Act.” (quoting Glob. Crossing Tel-

ecomm., Inc. v. Metrophones Telecomm., Inc., 550 U.S. 45, 48 (2007))). The Com-

mittee on Small Business recognized that 8(a) contractors may need to sell

equity interests in their businesses to attract additional capital, but it also noted

“a need to ensure that contract opportunities provided to develop small mi-

nority businesses not be transferred to non-disadvantaged firms outside the

program.” Committee on Small Business, 100th Cong., Summary of Major

Provisions of Public Law 100-656 “The Business Opportunity Development

Reform Act of 1988” 5 (Comm. Print. 1988). Which is why “with some excep-

tions, contracts transferred by 8(a) companies will be terminated for the con-

venience of the government.” Id.

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23-10600 Opinion of the Court 25

intended to create such a large and obvious loophole in one of the

key regulatory innovations of the [8(a) program].” County of Maui

v. Haw. Wildlife Fund, 590 U.S. 165, 178–79 (2020). 17

All these considerations compel one conclusion: in this con-

text, “participant” includes both nongraduated and graduated con-

cerns. The 8(a) program rules on control and unconditional own-

ership therefore still applied to DWG while it performed on its ex-

isting 8(a) contracts.

ii. Ownership

That leads us to the District Court’s alternative ruling that,

even if the control and ownership requirements applied, Relators

failed to plausibly allege that Gose lost unconditional ownership of

DWG. Relators argue that the District Court’s alternative ruling is

17 Nor are we convinced that the three decisions of SBA’s Office of Hearing

and Appeals cited by GAIC and NASCO support a different interpretation.

None of these decisions deal with whether a graduated 8(a) contractor with

ongoing contracts is still a participant. Instead, two of the decisions reiterate

that 8(a) graduates are not eligible for new contracts or subcontracts.

See FTSI-Phelps JV, SBA No. SIZ-5583, 2014 WL 4804769, at *8 & n.3 (Aug. 19,

2014) (noting that the procurement was a “total small-business set-aside, not a

competitive 8(a) procurement” and even if it were the contractor “would not

be eligible because it had graduated” before the offer deadline); Reality Techs.,

Inc., SBA No. BDP-455, 2012 WL 8134444, at *2 n.2 (Nov. 21, 2012) (explaining

that an 8(a) graduate is considered non-disadvantaged for purposes of regula-

tory restrictions on subcontracting). And the other dealt with an SBA decision

to graduate a contractor from the 8(a) Program early. David’s Custom Roofing

& Painting, Inc., SBA No. BDP-344, 2010 WL 8747273 (Mar. 16, 2010) (dismiss-

ing as moot an SBA size determination appeal because the contractor’s

“nine-year program term [had already] expired”).

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26 Opinion of the Court 23-10600

wrong for two reasons. First, they contend that even if the District

Court’s ownership analysis was correct, its analysis is not enough

to dismiss their claims because 13 C.F.R. § 124.515(a) applies to a

change in ownership or a change in control. That is, either can trig-

ger contract termination and the court made no ruling on the di-

vesture of Gose’s control. 18 Second, they assert that the complaint

plausibly pled loss of unconditional ownership, pointing to the

Right of First Refusal and Option Agreement and the Final MAS

Agreement, the latter of which assigned 100% of DWG’s revenue

to GAIC and NASCO. GAIC and NASCO adopt the District

Court’s analysis and provide no response to Relators’ first point.

We agree with Relators.

13 C.F.R. § 124.515(a) mandates termination for the conven-

ience of the Government “if one or more of the individuals upon

whom eligibility for the 8(a) BD program was based relinquishes

or enters into any agreement to relinquish ownership or control of

the Participant.” (emphasis added). And 15 U.S.C. § 637(a)(21)(A)

provides the same. The loss of either unconditional ownership or

control triggers mandatory termination, absent SBA approval of a

18 Relators also argue that the complaint plausibly pled that Gose lost control

of DWG because he: (1) was shut out of all significant decision-making and

access to financial and contractual information; (2) lost control over DWG’s

board of directors; and (3) earned a salary that was less than two other non-dis-

advantaged individuals at DWG. “Because the [D]istrict [C]ourt did not ad-

dress these issues, we decline to do so here in the first instance.” See MSP Re-

covery Claims, Series LLC v. Metro. Gen. Ins. Co., 40 F.4th 1295, 1306 (11th Cir.

2022).

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23-10600 Opinion of the Court 27

waiver. See Int’l Data Prods. Corp. v. United States, 64 Fed. Cl. 642,

650 (2005). GAIC and NASCO do not refute this. And the District

Court implicitly recognized this by analyzing both Relators’ loss of

control (i.e., that the loss-of-control provision did not apply) and

ownership allegations. 19 Because neither the District Court nor

GAIC and NASCO have articulated any other reasons for challeng-

ing Relators’ allegations about control, and given our holding

above that the provision applied, there is no dispute that Relators

sufficiently pled that Gose lost the requisite control by November

15, 2012. We therefore need not address whether Relators also

plausibly pled loss of ownership. 20

19 To put a finer point on this, the “or” in 13 C.F.R. § 124.515(a) and 15 U.S.C.

§ 637(a)(21)(A) must be disjunctive. As we and the Supreme Court have ex-

plained, “[t]he ‘ordinary use’ of ‘or’ ‘is almost always disjunctive,’ and ‘the

words it connects are to be given separate meanings.’” Santos v. Healthcare Rev. Re-

covery Grp., 90 F.4th 1144, 1153 (11th Cir. 2024) (per curiam) (quoting United

States v. Woods, 571 U.S. 31, 45 (2013)). True, “statutory context can overcome

the ordinary, disjunctive meaning of ‘or.’” Encinco Motorcars, LLC v. Navarro,

584 U.S. 79, 87 (2018); Pulsifer v. United States, 144 S. Ct. 718, 730–31 (2024)

(noting that statutory construction can depend on “text in its legal context”).

But context here reinforces the ordinary disjunctive meaning. Consider that

admission to the 8(a) program requires both unconditional ownership and

control by “one or more socially and economically disadvantaged individu-

als.” 13 C.F.R. § 124.101; id. §§ 124.105 to .106. If both ownership and control

are required for admission, loss of either warrants mandatory termination.

Otherwise, as explained above, the purpose of the 8(a) program is easily

thwarted. See supra Section III.B.1.i.

20 Were we to address the ownership pleading issue it might be an alternative

holding because it is unnecessary to decide this case. True, alternative hold-

ings are permissible. Cf. Bravo v. United States, 532 F.3d 1154, 1162–63 (11th

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28 Opinion of the Court 23-10600

iii. The Fraudulent Inducement Theory

The District Court also dismissed Relators’ false present-

ment and false statement claims because those claims turned on a

flawed fraudulent inducement theory. Under the District Court’s

rationale, for false presentment claims “[t]he falsity or fraudulent

conduct must . . . be found in a claim for payment.” Native Am.

Servs. Corp., 2022 WL 18932981, at *7. And for false statement

claims, there must be some “connection between the alleged false

record or statement and an actual claim made to the government.”

Id. at *8.

Relators argue that this reasoning conflicts with decisions

across the country—including the Supreme Court and our Court.

Relators add that the FCA should be construed broadly as it was

intended to cover all types of fraud that might result in loss to the

Government, including fraudulent inducement. GAIC and

NASCO again adopt the District Court’s reasoning. And, relying

on the Supreme Court’s decision in Universal Health Services, Inc. v.

United States ex rel. Escobar, 579 U.S. 176, 194 (2016), and our deci-

sion in Clausen, they emphasize that Relators did not allege any af-

firmative misrepresentations within the content of any task order

Cir. 2008) (explaining that alterative holdings “are as binding as solitary hold-

ings”); Hodges v. Att’y Gen., State of Fla., 506 F.3d 1337, 1348 (11th Cir. 2007)

(reaching an alternative holding). But they are “often just a bad idea” because

they overstep the judiciary’s role, increase the likelihood of arriving at an in-

correct opinion, increase the perception of impartiality, and risk upsetting col-

legiality. United States v. Files, 63 F.4th 920, 933 (11th Cir. 2023) (Newsom &

Tjoflat, JJ., concurring).

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23-10600 Opinion of the Court 29

bids or payment claims. Relators have the more persuasive argu-

ment.

“The False Claims Act . . . is ‘the Government’s primary lit-

igative tool for combating fraud’ against the Government.” United

States v. Corp. Mgmt., Inc. v. United States, 78 F.4th 727, 732 (5th Cir.

2023) (quoting S. Rep. No. 99-345, at 2 (1986)). To be sure, the FCA

“is not ‘an all-purpose antifraud statute,’ or a vehicle for punishing

garden-variety breaches of contract or regulatory violations.” Es-

cobar, 579 U.S. at 194 (quoting Allison Engine Co. v. United States ex

rel. Sanders, 553 U.S. 662, 672 (2008)). But “Congress wrote [the

FCA] expansively, meaning ‘to reach all types of fraud, without

qualification, that might result in financial loss to the Govern-

ment.’” Cook County v. United States ex rel. Chandler, 538 U.S. 119,

129 (2003) (quoting United States v. Neifert–White Co., 390 U.S. 228,

232 (1968)). The question then is whether the FCA encompasses

the type of fraud alleged by Relators here. Binding precedent from

the Supreme Court and our Court provide the answer: yes. 21

21 Other circuits have gone so far as to recognize that “[t]he legislative history

of the FCA also supports the conclusion that fraud-in-the-inducement is a rec-

ognized theory of liability under the Act.” In re Baycol Prods. Litig.,

732 F.3d 869, 876 (8th Cir. 2013). When it amended the FCA in 1986, “Con-

gress noted that, under FCA case law, ‘each and every claim submitted under

a contract . . . or other agreement which was originally obtained by means of

false statements or other corrupt or fraudulent conduct, or in violation of any

statute or applicable regulation, constitutes a false claim.’” United States ex rel.

Bettis v. Odebrecht Contractors of Cal., Inc., 393 F.3d 1321, 1326 (D.C. Cir. 2005)

(quoting S. Rep. No. 99-345, at 9 (1986), as reprinted in 1986 U.S.C.C.A.N. 5266,

5274).

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30 Opinion of the Court 23-10600

See United States ex rel. Marcus v. Hess, 317 U.S. 537, 543–44 (1943),

superseded in part on other grounds as noted in Schindler Elevator Corp.

v. United States ex rel. Kirk, 563 U.S. 401 (2011); Marsteller, 880 F.3d

at 1314–15.

The Supreme Court recognized this type of fraudulent in-

ducement theory in Hess. There, electrical contractors colluded to

ensure there would be no price competition on Public Works Ad-

ministration (P.W.A.) projects. Hess, 317 U.S. at 543. In upholding

the jury verdict for the relators, the Supreme Court explained that

the

fraud did not spend itself with the execution of the

contract. Its taint entered into every swollen estimate

which was the basic cause for payment of every dollar

paid by the P.W.A. into the joint fund for the benefit

of respondents. The initial fraudulent action and every

step thereafter taken, pressed ever to the ultimate goal—

payment of government money to persons who had caused

it to be defrauded.

Id. at 543–44 (emphasis added).

We also recognized the viability of the fraudulent induce-

ment theory in Marsteller, noting that the theory was derived from

Hess. 880 F.3d at 1314–15. Marsteller centered on allegations that a

helicopter manufacturer “omitted lower-dollar sales” when provid-

ing pricing data to the Army during the bid processes and failed to

disclose conflicts of interest that “might have caused the Army to

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23-10600 Opinion of the Court 31

accept an inflated contract price.” Id. at 1305, 1315. 22 Citing the

same Hess passage above, we explained our understanding of the

fraudulent inducement theory: “[t]he contractor’s ultimate claims

for payment were ‘grounded in fraud’ when the Government paid

them, even though the ‘fraud’ occurred prior to the execution of

the contract itself.” Id. at 1314 (quoting Hess, 317 U.S. at 544). That

is, the “subsequent claims [were] false ‘because of an original fraud

(whether a certification or otherwise).’” Id. (quoting United States

ex rel. Hendow v. Univ. of Phoenix, 461 F.3d 1166, 1173 (9th Cir.

2006)). On that logic, we agreed “that the allegations of the rela-

tors’ complaint could support multiple theories of fraud in the in-

ducement.” Id. 23

22 The pricing data was “presumably [needed] to establish the commercial rea-

sonableness of the price proposed in [the manufacturer’s] bid.” Marsteller for

use & benefit of the United States v. Tilton, 880 F.3d 1302, 1305 (11th Cir. 2018).

FAR 12.209 requires contracting officers to “establish price reasonableness”

and advises them to “be aware of customary commercial terms and conditions

when pricing commercial products.” 48 C.F.R. § 12.209. That often requires

contracting officers to compare “proposed prices to historical prices paid,

whether by the Government or other than the Government, for the same or

similar items.” Id. § 15.404-1(b)(2)(ii); see also id. §§ 13.106-3(a)(2)(ii), 14.408-2.

23 We are not alone in our understanding of Hess. See, e.g., Harrsion v. Westing-

house Savannah River Co., 176 F.3d 776, 787–88 (4th Cir. 1999) (summarizing

FCA cases and noting that FCA “liability attached . . . because of the fraud sur-

rounding the efforts to obtain the contract or benefits status, or the payment

thereunder”); United States ex rel. Longi v. United States, 575 F.3d 458, 468 (5th

Cir. 2009) (“Under a fraudulent inducement theory, although the Defendants’

‘subsequent claims for payment made under the contract were not literally

false, [because] they derived from the original fraudulent misrepresentation,

they, too, became actionable false claims.’” (alteration in original) (quoting

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32 Opinion of the Court 23-10600

In rendering our opinion in Marsteller, we also explored the

effect of the Supreme Court’s opinion in Escobar because the rela-

tors’ complaint separately alleged an implied false certification the-

ory. 24 Id. at 1311. We found Escobar “helpful in assessing the rela-

tors’ fraud in the inducement theory,” but we were careful to note

United States ex rel. Laird v. Lockheed Martin Eng’g & Sci. Servs. Co., 491 F.3d 254,

259 (5th Cir. 2007))); United States v. United Techs. Corp., 626 F.3d 313, 319 (6th

Cir. 2010) (“Hess establishes that an invoice, which itself does not contain a

falsity, may supply the premise for a false claim if submitted in connection

with a fraudulently obtained contract.”); United States ex rel. Main v. Oakland

City Univ., 426 F.3d 914, 916 (7th Cir. 2005) (implicitly recognizing a fraudulent

inducement theory where a university lied in phase one of a two-phase appli-

cation for grants, loans, and scholarships but was not paid until it submitted

its phase two application); In re Baycol Prods. Litig., 732 F.3d at 876 (“[W]hen a

relator alleges liability under a theory of fraud-in-the[-]inducement, claims for

payment subsequently submitted under a contract initially induced by fraud

do not have to be false or fraudulent in and of themselves in order to state a

cause of action under the FCA.”); United States ex rel. Hendow v. Univ. of Phoenix,

461 F.3d 1166, 1173 (9th Cir. 2006) (describing Hess and explaining that the

fraudulent inducement theory is viable because “subsequent claims are false

because of an original fraud”); United States ex rel. Cimino v. IBM Corp.,

3 F.4th 412, 417 (D.C. Cir. 2021) (“Under longstanding Supreme Court prece-

dent, a violation of the FCA occurs when a person fraudulently induces the

government to enter a contract and later submits claims for payment under

that contract.”).

24 As the Supreme Court described it, according to the implied false certifica-

tion theory,

when a defendant submits a claim, it impliedly certifies com-

pliance with all conditions of payment. But if that claim fails

to disclose the defendant’s violation of a material statutory,

regulatory, or contractual requirement, . . . the defendant has

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23-10600 Opinion of the Court 33

that it was “far from self-evident that . . . the court’s assessment of

the implied certification theory should control [the] disposition of

the fraudulent inducement theory. Each theory of liability rests on

different factual allegations.” Id. at 1315. In the end, we remanded

for two reasons. First, we remanded so that the district court could

“consider whether to allow the plaintiffs to file a second amended

complaint that conform[ed] its allegations to the requirements of

Escobar.” Id. And second, after “conclud[ing] that the complaint

did plead fraud in the inducement, . . . we . . . remand[ed] so that

the district court c[ould] reexamine the allegations relating to that

theory.” Id.

Under Marsteller, Relators’ fraudulent inducement theory is

actionable. Our discussion of the fraudulent inducement theory of

FCA liability and the rationale that an “original fraud” renders fu-

ture claims for payment false, was integral to the part of the deci-

sion to remand to the district court to assess the allegations pertain-

ing to the relators’ claims. We see no reason why this does not

bind our decision here. See United States v. Gillis, 938 F.3d 1181,

1198 (11th Cir. 2019) (per curiam) (“The holding of a case com-

prises both the result of the case and those portions of the opinion

necessary to that result.” (quoting United States v. Caraballo-Mar-

tinez, 866 F.3d 1233, 1244 (11th Cir. 2017))).

made a misrepresentation that renders the claim ‘false or

fraudulent’ under § 3729(a)(1)(A).

Universal Health Servs., Inc. v. United States ex rel. Escobar, 579 U.S. 176, 180

(2016).

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34 Opinion of the Court 23-10600

GAIC and NASCO cannot sidestep Marsteller with Escobar or

Clausen. To begin, if Escobar prohibited FCA claims based on a

fraudulent inducement theory—like GAIC and NASCO suggest

that it does—we would not have remanded in Marsteller to evaluate

the fraudulent inducement claim. And it is unsurprising that we

did so. Escobar dealt with the implied false-certification theory in

which the relators alleged that a mental health facility submitted

Medicaid reimbursement claims with misleading representations

and omissions. 579 U.S. at 184–85. The essential element of the

relators’ claim was an implied false statement in the claims for pay-

ment. Fraudulent inducement was not at issue in the case. No part

of the Supreme Court’s analysis supports the proposition that a

fraudulent inducement claim is viable only if the fraudulent activity

is found in the claim for payment.

Likewise, GAIC and NASCO cannot rely on Clausen to save

their argument. Of course, the “sine qua non of a False Claims Act

violation” is the “submission of a claim.” Clausen, 290 F.3d at 1312.

Nothing in Marsteller displaces that requirement. What Marsteller

tells us is that the alleged falsity does not have to appear in the claim

itself and can instead be traced to the execution of the contract—

or in this case, bidding on individual task orders. 25 In the end, GAIC

and NASCO’s attempt to make an end run around Marsteller does

not hold up under scrutiny.

25 Under 15 U.S.C. § 632(w)(2)(A), a bid on a contract set aside for small busi-

ness concerns is deemed to be an “affirmative, willful, and intentional certifi-

cation of small business size and status.”

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23-10600 Opinion of the Court 35

Contrary to the District Court’s characterization, Relators’

claims do not seek to use the FCA as an all-purpose antifraud stat-

ute. Relators seek to hold GAIC and NASCO accountable for al-

leged fraudulent conduct that caused the Government to award

multiple task orders and pay millions of dollars to DWG instead of

legitimate 8(a) contractors. That is well within the FCA’s purview.

iv. Particularity

That brings us to the District Court’s final reason for dismiss-

ing Relators’ false presentment and false statement claims: Relators

failed to plead fraud with particularity because they did not specify

which bids or claims were supposedly fraudulent. Relators argue

that because these claims are based on a fraudulent inducement

theory, pointing to specific bids or task orders would not have

added any particularity. Rather, by alleging the precise actions and

events that made the bidding fraudulent (i.e., Gose’s loss of own-

ership and control) and the details of the specific task orders that

DWG fraudulently bid on, Relators contend that they have satisfied

Rule 9(b). Relators add that, even if the precise details about the

bids and claims are required, the allegations in the complaint give

GAIC and NASCO more than enough information to put them on

notice of the specific claims against them to prepare a defense.

GAIC and NASCO retort that the details Relators pled are

of “no moment.” Again relying on the District Court’s reasoning,

they contend Rule 9(b) requires details of the particular bids and

claims. GAIC and NASCO further assert that even if the particu-

larity focus should be on the fraudulent inducement allegations,

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36 Opinion of the Court 23-10600

Realtors still failed to satisfy Rule 9(b) because Relators offered no

details about the alleged duty to disclose DWG’s ineligibility. Rela-

tors have the better arguments.

“[T]o satisfy Rule 9(b)’s heightened-pleading requirements,

the relator must allege . . . particular facts about ‘the “who,”

“what,” “where,” “when,” and “how” of fraudulent submissions to

the government.’” Urquilla-Diaz v. Kaplan Univ., 780 F.3d 1039, 1052

(11th Cir. 2015) (citation omitted) (quoting Corsello v. Lincare, Inc.,

428 F.3d 1008, 1014 (11th Cir. 2005) (per curiam)). “Rule 9(b) serves

two purposes: ‘alerting defendants to the precise misconduct with

which they are charged and protecting defendants against spurious

charges of immoral and fraudulent behavior.’” United States ex rel.

84Partners, LLC v. Nuflo, Inc., 79 F.4th 1353, 1360 (11th Cir. 2023)

(quoting Clausen, 290 F.3d at 1310). “This second purpose is ‘espe-

cially important’ in [FCA] cases filed by relators; in such cases the

rule ‘ensures that the relator’s strong financial incentive to bring an

FCA claim . . . does not precipitate the filing of frivolous suits.’” Id.

(omission in original) (quoting United States ex rel. Atkins v. McInteer,

470 F.3d 1350, 1360 (11th Cir. 2006)).

That said, “a court considering a motion to dismiss for fail-

ure to plead fraud with particularity should always be careful to

harmonize the directives of [R]ule 9(b) with the broader policy of

notice pleading.” Friedlander v. Nims, 755 F.2d 810, 813 n.3 (11th Cir.

1985), abrogated on other grounds by Wagner v. Daewoo Heavy Indus.

Am. Corp., 314 F.3d 541 (11th Cir. 2002) (en banc). Which is why a

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23-10600 Opinion of the Court 37

sister circuit has aptly explained that a court should “hesitate to dis-

miss a complaint under Rule 9(b) if the court is satisfied (1) that the

defendant has been made aware of the particular circumstances for

which she will have to prepare a defense at trial, and (2) that plain-

tiff has substantial prediscovery evidence of those facts.” Harrison

v. Westinghouse Savannah River Co., 176 F.3d 776, 784 (4th Cir.

1999). 26

Relators’ complaint satisfies these requirements. At its core,

this is a fraudulent inducement case.27 As the Eighth Circuit has

explained, “a claim alleging fraud in the inducement of a govern-

ment contract . . . focus[es] on the false or fraudulent statements

which induced the government to enter into the contract at the

outset.” In re Baycol Prods. Litig., 732 F.3d 869, 876 (8th Cir. 2013).

When a relator alleges liability under a fraudulent inducement the-

ory, “claims for payment subsequently submitted under a contract

[or task order] initially induced by fraud do not have to be false or

26 Requiring plaintiffs to have substantial prediscovery evidence of those facts

prevents plaintiffs from “learn[ing] the complaint’s bare essentials through dis-

covery and . . . needlessly harm[ing] a defendant’s goodwill and reputation by

bringing a suit that is, at best, missing some of its core underpinnings, and, at

worst, are baseless allegations used to extract settlements.” United States ex rel.

Clausen v. Lab’y Corp. of Am., Inc., 290 F.3d 1301, 1313 n.24 (11th Cir. 2002).

27 Although paragraph 208 of Relator’s complaint suggests a separate implied

false certification theory, Relators did not press this theory in response to

GAIC’s and NASCO’s motions to dismiss. To the extent that Relators attempt

to revive this theory in their reply brief, that attempt comes too late. See NLRB

v. Allied Med. Transp., Inc., 805 F.3d 1000, 1009 (11th Cir. 2015) (“Arguments

made for the first time in the reply brief . . . are forfeited.”).

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38 Opinion of the Court 23-10600

fraudulent in and of themselves in order to state a cause of action

under the FCA.” Id.; see also Harrison, 176 F.3d at 788. Specifying

individual bids or claims—which themselves may not contain false

information—adds little, if any, particularity concerning “the cir-

cumstances constituting fraud” here. Fed. R. Civ. P. 9(b);

Cf. Clausen, 290 F.3d at 1312 & n.21 (listing some types of infor-

mation that might help a plaintiff plead a claim under the FCA with

particularity but cautioning that Rule 9(b) “does not mandate all of

this information for any . . . alleged claims”). Instead, these addi-

tional and unnecessary details contravene Rule 8’s “short and plain

statement” mandate.

As to the alleged fraudulent conduct, Relators’ complaint

sufficiently identifies the who, what, where, when, and how. The

complaint identifies (1) who participated in the alleged fraud:

GAIC and NASCO; (2) what the alleged fraudulent activity was:

bidding on task orders and submitting claims while not disclosing

DWG’s inability to bid or seeking a waiver under 13 C.F.R.

§ 124.515(a)–(b); (3) details about where the alleged fraud took

place: e.g., specific task orders that GAIC and NASCO fraudulently

bid under, the contract numbers, places of performance, award

dates, and end dates, and so on; (4) when DWG became ineligible

to bid thereby rendering any later bids or claims to be false: Novem-

ber 15, 2012; and (5) how the alleged fraudulent activity occurred:

GAIC and NASCO caused Gose to lose 51% unconditional owner-

ship, control, or both, and that GAIC and NASCO were aware of

the ramifications of this.

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23-10600 Opinion of the Court 39

We fail to see how Relators’ allegations are not enough to

state a claim for relief under a fraudulent inducement theory. Un-

like other fraudulent inducement FCA cases in which the allega-

tions have “fallen short,” here there is more than enough infor-

mation to put GAIC and NASCO on notice of the specific claims

against them and to allow them to prepare a defense. See, e.g.,

Clausen, 290 F.3d at 1312 & n.21. GAIC and NASCO know the de-

tails of the alleged fraud, the precise contracts at issue, the places

of performance, and the alleged date DWG became ineligible to

bid. Nothing prevents GAIC and NASCO from reviewing the spe-

cific bids, task orders, and payment claims associated with those

contracts to prepare a defense. And Relators have substantial pre-

discovery evidence of those facts, as shown by the detailed com-

plaint and accompanying exhibits. We therefore conclude that Re-

lators’ allegations comply with Rule 9(b).

2. Conspiracy Claims

Finally, we arrive at the District Court’s dismissal of Rela-

tors’ conspiracy claims. It did so because it found that Relators had

failed to state a claim under § 3729(a)(1)(A)–(B) and failed to plead

any conspiracy with particularity. Relators contend that their com-

plaint pled conspiracy claims with particularity. They point to the

complaint’s allegations about communications and meetings be-

tween GAIC and NASCO to seize ownership and control over

DWG and the Final MAS agreement, which memorialized the con-

spiracy. Again, GAIC and NASCO rely on the District Court’s anal-

ysis. As we have already explained, we disagree with the District

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40 Opinion of the Court 23-10600

Court’s conclusion on Relators’ § 3729(a)(1)(A)–(B) claims. So we

limit our discussion here to why we agree with Relators that their

conspiracy claims satisfy Rule 9(b).

As well as imposing liability for presenting false claims and

making false statements, the FCA makes liable any person who

“conspires to commit a violation of ” the FCA. See 31 U.S.C.

§ 3729(a)(1)(C). To state a claim for conspiracy under the FCA,

the plaintiff must show “(1) that the defendant con-

spired with one or more persons to get a false or

fraudulent claim paid by the United States; (2) that

one or more of the conspirators performed any act to

effect the object of the conspiracy; and (3) that the

United States suffered damages as a result of the false

or fraudulent claim.”

Corsello, 428 F.3d at 1014 (quoting United States ex rel. Stinson v. Prov-

ident Life & Accident Ins. Co., 721 F. Supp. 1247, 1259 (S.D. Fla. 1989))

(interpreting the pre-amendment version of the statute). 28 And, as

with other FCA claims, “a plaintiff alleging a conspiracy to commit

fraud must ‘plead with particularity the conspiracy as well as the

overt acts . . . taken in furtherance of the conspiracy.’” United States

ex rel. Grubbs v. Kanneganti, 565 F.3d 180, 193 (5th Cir. 2009) (omis-

sion in original) (quoting FC Inv. Grp. LC v. IFX Markets, Ltd.,

28 As our Court has mentioned in an unpublished opinion, “it is not clear

whether damages remain a required element under the new conspiracy pro-

vision following the 2009 amendments.” United States v. HPC Healthcare, Inc.,

723 F. App’x 783, 791 n.4 (11th Cir. 2018). We need not answer that question

because Relators have pled that the United States suffered damages.

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23-10600 Opinion of the Court 41

529 F.3d 1087, 1097 (D.C. Cir. 2008), overruled on other grounds by Er-

win-Simpson v. AirAsia Berhad, 985 F.3d 883 (D.C. Cir. 2021)).

Relators’ complaint not only pleads these elements, but it

does so with particularity by “alleg[ing] ‘facts as to time, place, and

substance of [GAIC and NASCO’s] alleged fraud,’ [including] ‘the

details of [GAIC and NASCO’s] allegedly fraudulent acts, when

they occurred, and who engaged in them.’” Urquilla-Diaz, 780 F.3d

at 1051 (quoting Cooper v. Blue Cross & Blue Shield of Fla., Inc.,

19 F.3d 562, 567–68 (11th Cir. 1994) (per curiam)). Relators’ com-

plaint alleges that through a series of emails (on August 3–6, 2012),

phone calls (on August 6, 2012), and in-person meetings in Cincin-

nati (on August 8, 2012, and September 23, 2012), GAIC and

NASCO formed a conspiratorial agreement to seize ownership and

control of DWG, even going so far as to name the executives who

orchestrated the agreement. The complaint alleges that the con-

spiracy was reduced to writing in the Final MAS Agreement, which

was attached to the complaint. What’s more, the complaint also

alleges that GAIC and NASCO: (1) agreed not to notify or seek a

waiver from the SBA; (2) instructed DWG not to notify the SBA

and (3) agreed to and did bid on future task orders under the 8(a)

contracts, despite the lack of waiver.

We are satisfied that Relators’ complaint adequately states a

claim for conspiracy under the FCA and does so with the particu-

larity Rule 9(b) requires. As with Relators’ false presentment and

false statement claims, the complaint contains sufficient infor-

mation on which GAIC and NASCO can prepare a defense. And,

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42 Opinion of the Court 23-10600

like Relators’ other claims, they have substantial prediscovery evi-

dence of those facts, as shown by the complaint and exhibits.

IV. Conclusion

We hold that, at this procedural stage, Relators’ complaint

plausibly alleges false presentment, false statement, and conspiracy

claims under 31 U.S.C. § 3729(a)(1)(A)–(C) against GAIC and

NASCO. We therefore reverse and remand this case to the District

Court for further proceedings consistent with this opinion.

REVERSED AND REMANDED.